Industry Leaders Applaud GST Council’s Decision on Rate Cuts
By: Admin | September 11, 2024 | Categories: GST Recent News | 4 Min Read
GST Council Announces Major Rate Cuts and Policy Changes
Industry leaders have welcomed the GST Council’s recent decisions. During the 54th meeting on Monday, the Council introduced several measures to provide relief, which businesses have broadly praised.
Exemption for Foreign Airlines
The GST Council decided to exempt GST on services imported by foreign airlines operating in India through branch offices. This decision significantly benefits the airline industry, which had faced tax demands of nearly ₹39,000 crore from the Directorate General of GST Intelligence (DGGI).
A tax expert commented, “This exemption provides major relief for the airline sector. It covers the import of services by foreign airlines from their head offices or overseas establishments and helps resolve ongoing tax disputes.”
Food Industry Gains from GST Reduction
The Council also reduced the GST rate on namkeen products from 18% to 12%. Furthermore, the Council clarified tax classifications, ensuring that snack products such as puff snacks fall under the correct tax bracket.
“The clarification on tax classification for certain snack products addresses past disputes and reduces GST to 12%,” another expert noted.
Healthcare Sector Receives Significant Relief
In another move, the GST rate on critical cancer drugs decreased from 12% to 5%. Additionally, the Council introduced GST exemptions for helicopter-sharing services used for religious pilgrimages. This change further eases the burden on consumers.
“The reduction in GST rates for cancer drugs, namkeens, and religious helicopter services offers significant relief across multiple sectors,” said a tax expert.
Future Plans and New Exemptions
Looking ahead, the Council formed a Group of Ministers (GoM) to explore the possibility of lower GST rates for life and health insurance services. The GoM is expected to present its report by October 2024. Additionally, the Council introduced GST exemptions for research grants received by government universities and research centers. This initiative aims to enhance India’s R&D capabilities.
Although these changes were positively received, the Council did not address the taxation of online gaming during the meeting. Discussions on this issue will continue.
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